BA Trustees Limited v Ma'a Limited
[2014] NZHC 1967
•20 August 2014
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2013-404-4045 [2014] NZHC 1967
BETWEEN BA TRUSTEES LIMITED AND FUEGO
LIMITED Plaintiffs
AND
MA'A LIMITED AND JOHN MAALAULI VAIGAFA
First Defendants
IVAN DRUSKOVICH AND VESNA DRUSKOVICH
Second Defendants
AUCKLAND COUNCIL Third Defendant
Hearing: On the Papers Appearances:
A C Sorrell for the Plaintiffs
J Foster for the Second DefendantsJudgment:
20 August 2014
JUDGMENT (NO 2) OF BROWN J [Formal Order and Costs]
This judgment was delivered by me on 20 August 2014 at 1 pm, pursuant to r 11.5 of the High Court Rules
Registrar/Deputy Registrar
Solicitors: Paddy Orr & Co, New Lynn, Auckland
Rainey Collins Wright, Auckland
Counsel: A Sorrell, Auckland
BA TRUSTEES LTD v MA'A LTD [2014] NZHC 1967 [20 August 2014]
[1] In my judgment of 26 May 2014,1 I reserved leave to the parties to apply to refine the terms of the order and I made directions for the filing of memoranda as to costs.
Form of Order
[2] The plaintiffs and the second defendants (the Druskovichs) have now agreed upon certain revisions to the form of order in my judgment. I am willing to make the amendments to which they have agreed. The final order in this matter is that annexed to this judgment.
Costs
[3] This proceeding concerned a garage located on the Druskovichs’ property, which encroached on the plaintiffs’ properties, and a right-of-way over the BA Trustees’ property, in favour of the Druskovichs’ property, which ran up to the garage entrance.
[4] The plaintiffs originally sought three distinct orders:
(a) The removal of those parts of the garage which encroached on the
plaintiffs’ properties;
(b) A modification of the easement granting the right-of-way; and
(c) The removal of the garage in its entirety on the ground that it was in breach of the third condition of the right-of-way easement in that it had a frontage wholly on the right-of-way.
[5] The litigation appears to have been provoked by the conduct of the first defendants who were tenants in the Druskovichs’ property. Although the garage as originally constructed encroached to a small extent into the right-of-way over the BA Trustees’ land, the first defendants undertook additional work which increased
the extent of the encroachment. Secondly, the first defendants operated a café in the tenanted premises. Patrons began to access the café via the right-of-way and parked motor vehicles on other parts of the BA Trustees’ land.
[6] Those two events prompted the request for the relief in (a) and (b) above respectively. The implications of the third order originally sought were considerably more significant than the first and second orders. The third order would have required the demolition of the garage that had stood on the Druskovichs’ property for over 40 years.2
[7] Although the first defendants filed a statement of defence, they took no part in the hearing. Indeed, the statement of defence which they filed was effectively an admission by virtue of r 5.48(3). Prior to the hearing on 3 March 2014, the Druskovichs had not filed a statement of defence. However, Mr Druskovich twice appeared in list hearings.
[8] As my Minute of 4 March 2014 records, the proceeding was listed for a formal proof hearing on Monday 3 March 2014. Mr Druskovich appeared at that time. Because I concluded that there may be a miscarriage of justice if judgment by default was entered, I elected to proceed as a defended hearing. After hearing evidence, the proceeding was adjourned for closing submissions on Wednesday
26 March 2014.
[9] At the hearing on 26 March 2014, Ms Foster appeared for the Druskovichs. At that time I granted leave to the Druskovichs to file a statement of defence and counterclaim. I also gave leave to the plaintiffs to file the first amended statement of claim which reflected the fact that agreement had been reached between the plaintiffs and the Druskovichs as to the terms of a modification of the easement so as to restrict the use of the right-of-way.
[10] At that time Ms Foster advised the Court that the Druskovichs had decided to make alterations to the garage with the consequence that there would no longer be an encroachment either on the right-of-way or on the Fuego property.
[11] The sole matter remaining for determination was the dispute concerning the application of the easement condition to the garage. On that issue the plaintiffs elected to seek only a declaration and withdrew their request for an injunction requiring the removal of the garage. Because the Druskovichs were uncertain as to the potential implications of the grant of a declaration, they proceeded with their counterclaim for relief under s 317 of the Property Law Act 2007.
[12] In summary, the outcome of the combination of the parties’ negotiations and my judgment of 26 May 2014 was:
(a) The Druskovichs agreed to remove the garage to the extent of the
encroachment on the plaintiffs’ properties.
(b)BA Trustees Ltd and the Druskovichs agreed to vary the terms of the right-of-way to limit the degree of access provided.
(c) BA Trustees Ltd obtained a declaration that the garage was a building with a frontage wholly on the right-of-way.
(d)The Druskovichs succeeded on their counterclaim in obtaining an order varying condition 3 of the right-of-way so as to enable the garage to remain.
[13] The plaintiffs now seek costs as follows:
For the period 27 August 2013 to 22 October 2013 (the date of the first defendants’ statement of defence comprising the r 5.48(3) admission), costs against the first defendants and the second defendants jointly and severally as follows:
Costs 12,736.00
Disbursements 2,463.55Total $15,199.55
For the period 23 October 2013 to the conclusion of the hearing, costs against the second defendants only as follows:
Costs 17,313.00
Disbursements 15,122.64Total $32,435.64
[14] The second defendants seek costs on their counterclaim as follows: Costs 11,343.00
Disbursements 500.00
Total $11,843.00
[15] The case is somewhat unusual, not only in the way in which it progressed, but also in terms of the combination of outcomes on the various issues raised.
[16] The plaintiffs have achieved the outcome that they sought in relation to both the garage encroachment and the amendment to the right-of-way easement. However, that is because the second defendants have consented to that course and, so far as the encroachment is concerned, have assumed the obligation to meet the cost of the alterations to the garage.
[17] The plaintiffs have obtained a declaration concerning the status of the garage as having a frontage wholly on the right-of-way. They did not obtain (indeed they abandoned) any form of relief which would have required the garage to be removed. However, continuing with their claim, albeit confined to declaratory relief, necessitated the second defendants pursuing their counterclaim for relief under the Property Law Act on which they have succeeded.
[18] Save with reference to the first defendants, whose actions provoked the litigation and who took no part in the hearing, I consider that the observations of the Court of Appeal in Packing Ltd (In Liq) formerly known as Bond Cargo v Chilcott3
are in point:
3 Packing Ltd (In Liq) formerly known as Bond Cargo v Chilcott (2003) 16 PRNZ 869 (CA).
[5] In a case such as the present, where in broad terms each party has had similar success, we do not consider it helpful to focus too closely on the question which party has failed and which has succeeded. Costs in a case such as this should rather be based on the premise that approximately equal success and failure attended the efforts of both sides. To that starting point should be added issues such as how much time was spent on each transaction or group of transactions in issue, and any other matters which can reasonably be said to bear on the Court’s ultimate discretion on the subject of costs. In the end, as in all costs matters, the Court must endeavour to do justice to both sides, bearing in mind all material features of the case.
[19] Speaking with reference to the facts of that case, the Court said that success or failure was better assessed by a realistic appraisal of the end result, rather than by focusing on who initiated what step, and the extent to which that step succeeded or failed.
[20] Approaching the matter in that way, in my view the appropriate and fair costs outcome, having regard to the conduct of the proceeding, the ultimate combination of outcomes on the various issues and the ultimately co-operative approach adopted by the Druskovichs, is as follows:
(a) The plaintiffs are entitled to costs solely against the first defendants in respect of the period until 22 October 2013 in the sum of $15,199.55.
(b)The plaintiffs are entitled to costs against the second defendants in the amount of 50 per cent of the costs and disbursements incurred subsequent to 22 October 2013, that is in the sum of $16,217.82.
(c) The second defendants are entitled to costs against the plaintiffs on their counterclaim in the sum of $11,843.00.
In the event, the plaintiffs are entitled to a net sum from the second defendants of
$4,374.82.
[21] The reasons why I have confined the plaintiffs’ costs against the second
defendants to half of the post-22 October 2013 costs claim are:
(a) The only matter which ultimately required determination was the fate of the garage which had existed for more than 40 years.
(b)Essentially the plaintiffs’ claim concerning the application of Condition 3 of the right-of-way easement appeared to amount to an issue of principle, particularly in light of the abandonment of the prayer for injunctive relief.
(c) Although the plaintiffs obtained a declaration, the second defendants succeeded in securing the retention of the garage. On the overall issue of the legitimacy of the garage, the second defendants are in reality the successful party.
(d)On the other two issues, the second defendants agreed to orders which in some respects were generous to the plaintiffs. In that regard I note that the right-of-way has existed since 1929 and the garage has undoubtedly encroached to some degree (prior to the first defendants’ alterations) for a significant period of time.
[22] The outcome whereby the second defendants make a modest payment to the plaintiffs is a very fair result.
[23] No costs are sought against the third defendant, the Auckland Council, and I
understand that no claim for costs is made by the Auckland Council, a stance which I
consider is appropriate and constructive.
Brown J
JUDGMENT ON TRIAL BY A JUDGE
This proceeding was heard on 3 and 26 March 2014 at Auckland before the Honourable Justice Brown who, having heard from A C Sorrell, counsel for the plaintiffs, J L Foster, counsel for the second defendants (on 26 March 2014 only), and JAP Hilario counsel for the third defendant, there being no appearance for the first defendants but pursuant to Rule 5.48(3) the first defendants being treated as having admitted the claim, and having heard the evidence adduced, gives judgment in the following terms:
1. By consent the second defendants will, at their expense, by 30 September
2014 remove the garage structure at the western end of Lot 3 DP 22812 Title Identifier NA616/48 to the extent it encroaches over the boundary of either Lot 21 DP 19592 Title Identifier NA464/134 or Lot 1 DP 66697 Title Identifier NA24C/1209.
2.A declaration that the garage structure at the western end of Lot 3 DP 22812 adjacent to Lot 1 DP 66697 is a building with a frontage wholly to the right- of-way described in Transfer 242333.
3. By consent the right-of-way described in Transfer 242333 appurtenant to Lot
3 DP 22812 Title Identifier NA616/48 (“dominant tenement”) over Lot 1 DP
66697 Title Identifier NA24C/1209 is amended pursuant to section 317
Property Law Act 2007.
(a) By the addition of the following words:
“The right-of-way is limited to that of providing access to any building erected on the dominant tenement for the purposes only of the authorised uses of the registered proprietor and lessees of the dominant tenement but excluding therefrom all invitees except those providing services for those authorised uses or deliveries to the registered proprietor or lessees.”
(b)Condition 3 of the right-of-way as stated on Deposited Plan 22812 is deleted and replaced with the following words:
“That no buildings (save for a garage substantially the same as the garage structure existing at the date of the order of the High Court dated 26 May 2014 but within the boundary of Lot 3 DP 22812) be erected having a frontage wholly to the right-of-way.”
4.Leave is reserved to the parties to apply for directions in relation to the performance of Order 1 above.
5.The plaintiffs are entitled to costs and disbursements against: The first defendants in the sum of $15,199.55
The second defendants in the sum of $16,217.82
6.The second defendants are entitled to costs on their counterclaim against the plaintiffs in the sum of $11,843.00.
Signature:
(Registrar/Deputy Registrar)
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